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Ha v. Bank of America, N.A.

United States District Court, N.D. California, San Jose Division

July 22, 2014

MINA HA, Plaintiff,
v.
BANK OF AMERICA, N.A., et al., Defendants.

ORDER GRANTING-IN-PART BANA'S MOTION TO DISMISS AND MOTION TO STRIKE (Re: Docket Nos. 37 and 39)

PAUL S. GREWAL, Magistrate Judge.

Before the court are Defendant Bank of America, N.A.'s ("BANA") motions to dismiss and strike Plaintiff Mina Ha's second amended complaint.[1] Ha opposes. The parties appeared for a hearing. After considering the arguments, the court GRANTS BANA's motion, but only IN-PART as explained below.

I. BACKGROUND

A. Diversity Jurisdiction Lies Over the Case

Ha is a California resident raising California state law claims in this court pursuant to diversity jurisdiction.[2] BANA "is a diversified financial marketing and/or services company engaged primarily in residential mortgage banking and/or related" businesses domiciled in North Carolina.[3] "BNY is a diversified financial marketing and/or service company engaged primarily in residential mortgage banking and/or related" businesses domiciled in New York.[4] Resurgent "is a diversified financial marketing and/or services company engaged primarily in residential mortgage banking and/or related" businesses domiciled in South Carolina.[5]

B. Factual Background

Ha owns real property located at 20972 Greenleaf Dr., Cupertino, CA 95014.[6] Ha "purchased the Property on August 26, 2005."[7] In late November of 2006, Ha refinanced her loan with Countrywide Financial executing a promissory note and deed of trust in favor of Countrywide Financial on November 22, 2006.[8] Countrywide was purchased by BANA in 2008 and BANA "became the beneficiary of Plaintiff's loan, as well as the servicer."[9] Ha stayed current on her loan until mid-2008.[10]

"In or around mid-September 2008" Ha inquired about a possible loan modification.[11] A female representative of BANA "told Plaintiff, because she was current on her mortgage payments, she was ineligible for a loan modification."[12] Ha "inquired about other options and was told that she was otherwise qualified for a loan modification, however, in order to receive the modification, she would have to miss three months of payments."[13] Ha "was concerned about the effect of missing payments and expressed such concern to the female representative" of BANA.[14] In response:

[A BANA] female representative promised Plaintiff that, if Plaintiff missed payments in pursuit of a loan modification, [BANA] would not initiate foreclosure proceedings as long as Plaintiff was being reviewed for a loan modification. In fact, the representative stated that it was [BANA's] policy to not initiate foreclosure proceedings against any borrowers as long as they were in the process of applying for a loan modification or were being reviewed for a loan modification. Thus, in reliance on the representative's statements, Plaintiff, who was ready, willing, and able to make her mortgage payments, did not make her October 2008 [payment].[15]

"In or around October 2008, Plaintiff contacted [BANA] once more to inquire about the effect of missed" payments and

[Ha] spoke to another female representative of [BANA and was told] the same promise to Plaintiff, regarding [BANA's] policy regarding the initiation of foreclosure proceedings while a borrower was in the process of applying for, and being reviewed for, a loan modification. Further, Plaintiff asked if she should resume making payments on the loan following the three months of missed payments. The female representative stated that Plaintiff should not begin to make payments on the loan until she received a permanent modification, because any missed payments would be taken care of in the permanent modification. Thus, the female representative told Plaintiff to continue missing payments, following the three initial months, and stated that Plaintiff did not risk the initiation of foreclosure proceedings for doing so.[16]

By January, Ha had "missed three mortgage payments" and "submitted a complete loan modification application."[17] Ha "always complied" with "repeated request[s]" to submit additional documentation.[18] On May 1, 2009, while Ha was "was in the process of submitting a loan modification application, and while her application was pending review, Defendant [BANA] caused to be recorded a Notice of Default against Plaintiff's Property, thereby initiating foreclosure proceedings against Plaintiff's Property."[19] Ha contacted BANA about the notice of default and spoke to another BANA representative who "told Plaintiff to disregard the Notice of Default and to continue applying for a loan modification."[20] Ha "continued to seek a loan modification, rather than make arrangements to reinstate her loan."[21]

From June 2009 through April 2011, Ha "continued to submit all requested documents" to BANA in pursuit of a loan modification and "spoke to several representatives who reiterated the same promises made to Plaintiff in September and October 2008 - that a loan modification was forthcoming and that she need not worry about the risk of foreclosure while awaiting the final loan modification."[22] In April 2011, Ha spoke to a BANA representative "to confirm that they had received the latest documents that she had submitted" as BANA "requested additional documents to support Plaintiff's January 2009 loan modification" application, [23] but the BANA representative "stated that Plaintiff's loan modification application had been misplaced and, thus, Plaintiff would need to send in a complete new application."[24]

Ha expressed her concern over the missing documents and "was told that she would still receive a permanent modification, however, she needed to submit a new application."[25] The BANA representative "further stated that Plaintiff need not be concerned about foreclosure, if she submitted a new application."[26] In April 2011, Ha submitted "a complete new loan modification" application.[27]

In October 2011, Ha was informed her loan modification application was denied because "her husband's income was too great to qualify for a loan modification, however, the income relied upon by BANA in coming to this decision was inaccurate and her husband's income was actually less than BANA had determined."[28] Ha contacted BANA to contest the income determination and the BANA representative "acknowledged the mistake in her husband's income, however, he indicated that he could not fix it on his system."[29] Ha was told "that she would have to submit an entirely new application, which Plaintiff immediately did."[30]

Between October 2011 and February 2012, Ha continued contacting BANA to follow up on her application and BANA's representatives assured Ha "that her application was complete and was under review."[31] When Ha "inquired about the growing arrears on her loan, she was told that she need not worry about the arrears as the permanent modification would take the arrears into consideration."[32] Despite the fact that Ha's loan modification application was under review, BANA "caused a Notice of Trustee's Sale to be recorded against Plaintiff's Property on February 10, 2012 with a sale date of May 8, 2012."[33] "When Plaintiff received the Notice of Trustee's Sale, she phoned BANA and was told to disregard the notice. The representative stated that, because her loan modification application was under review, no foreclosure sale would proceed."[34]

In August 2012, Ha's application for a loan modification was denied for a second time.[35]

In August 2012, BANA appointed Ha "a designated point of contact within the company" - Antonio Guevara.[36] Ha worked with "Mr. Guevara on her loan modification application" until February 2013, but "Mr. Guevara constantly gave her conflicting information."[37] "Between March 2013 and May 2013, Plaintiff called Mr. Guevara weekly to check on the status of her application. Mr. Guevara consistently reassured Plaintiff that her application was complete and was still under review."[38]

In May 2013, Ha "received a letter indicating that her Deed of Trust and Promissory Note had been transferred to Defendant BNY, and that Defendant Resurgent would be the servicer of Plaintiff's loan."[39] Plaintiff called Resurgent "to ask about the status of her loan modification application that Plaintiff had sent to Defendant [BANA] in August 2012, as she still had not received a final determination."[40] Plaintiff's "new point of contact with Resurgent, Chris Burger, told Plaintiff that he had no record of a loan modification on file" for her account and that Ha "would have to reapply for a loan modification with Resurgent."[41]

In "June 2013, Plaintiff submitted a timely and complete loan modification to Defendant Resurgent."[42] "On June 14, 2013, Plaintiff called to check on the status of her application, and Mr. Burger confirmed that Plaintiff's application was complete and was under review. However, a week later, Mr. Burger retracted and told Plaintiff that her application had never been ...


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